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PCAOB member discusses current projects

Oct 28, 2013

On October 25, 2013, at the Brigham Young University Accountancy Alumni Conference in Provo, Utah, PCAOB member Jay Hanson discussed current PCAOB projects and the effects they may have on the audit profession and public companies.

After providing a brief history of the PCAOB, Mr. Hanson gave details of several projects occurring within the PCAOB, including:

Audit quality indicators — Aims to help define audit quality, establish a framework, and develop quantitative indicators that may be used to measure audit quality. It may affect content/focus of inspections, influence future standard-setting projects, and help track progress of a firm over time.

Outreach to audit committees — Assists the PCAOB in determining how to help audit committees enhance their oversight of audit firms and establish “two-way” communication with audit committees. The goal is to raise the overall performance of audit committees.

Increasing the amount of information provided by auditors in their reports — Proposing a change that will require auditors to include “critical audit matters” in their reports. This will lead to investors and others having additional insight of the audit.

Estimates, including fair value, and supervision of specialists — Updating existing audit performance standards “to ensure that auditors are doing enough work to be able to provide appropriate assurance on what are becoming increasingly complex financial statements.”

Auditing revenue — Monitoring the deliberations between the FASB and IASB as they develop a new accounting standard for revenue. The plan is for the PCAOB to issue its own auditing revenue standard that would be effective concurrently with the FASB accounting standard.